5 Common Myths & Misconceptions About Fintech

Fintech refers to the virtual currency, also called cryptocurrency that changes hands over a blockchain ledger. A growing number of users prefer it to bank transactions, but critics say that fintech will collapse for the following five reasons. Each of these is a myth.

1. Fintech is just a bubble

The dot.com crash was one bubble. Critics say fintech will be another and that it is doomed to crash. Wrong. As of January, 2017, the world has more than 35 billion-dollar-valued fintech companies that are predicted to grow from US$3 billion to US$6-8 billion by the end of the year, according to FinTech Business. Moreover, blockchain has influenced almost all segments of finance from banking to remittance and contracts. This is no passing fad.

2. Battle between banks and fintech industry

There is no such battle. Instead a growing number of banks are collaborating with fintech since they see fintech as the wave of the future. A recent 2016 Accenture study found that 80 percent of banks in London see working with fintech startups as a lead-in to business opportunity. Sixty percent of these incumbent banks were ready to spend significant capital to testing fintech potential.

3. Regulations will suppress fintech

Government regulations are infamous for curbing innovation and fintech is no different. Fintech deals with this by cooperating with government authorities and by lobbying to help fintech deal with challenges. This cooperation helps the blockchain industry win government assistance and helps government-certified fintech providers win more business.

4. Fintech will only reach large markets

Some say that fintech is an elite movement that largely or only touches superpowers such as Hong Kong, Silicon Valley, New York, and London. Far from it. Fintech influences lower-level markets all across the globe and is credited with helping third-world countries transfer money where few or no resources existed. Emerging markets such as southeast Asia, Africa, and Latin America are starting to gain traction, by launching fintech startups in regions that lack the traditional banking system.

5. Fintech only deals with lending and payment

Critics say that although fintech may offer valuable service, its advantages are limited to loans and transactions. The World Economic Forum shows that fintech offers far more. The report finds that 80% of fintech companies also deal with insurance, market provisioning, investment management and capital raising. On top of that, fintech also saves money and time and may be a much better financial fraud detector than are banks.

Critics like to doom fintech to a dismal future, but data shows otherwise. Far from a being a chaotic bubble, fintech is highly regulated, deals with a diversity of financial aspects, reaches remote markets, and collaborates with banks and financial industries to provide secure, effective and cheap service.

Latest Reviews

August 07, 2018, 10:56 am

TransferWise has good exchange rates and the lowest fees I have seen for both personal and business transfers. I have used them for 4 years now and have saved so much money. Transfers are secure, fast, and easy. Receive your first…

This is an update to my earlier review from March 2018. Pangea has resolved with satisfaction my only issue with them, my second transfer that took few days instead of just 4 hours. I have used their services few more times based…

I had transferred money to your account over 5 days ago. I have even sent screen of the statement showing the money has been transferred to your account now after 5 days, the customer service tells me they can't site the money. This…

Fantastic company for sending money to Mexico, period. I've used every other money transfer service out there, I promise you, but Bridge21 takes the cake. Their customer service is top notch, have an issue? Don't worry, they'll take…

Partner With CompareRemit

The world’s top remittance companies have chosen to work with CompareRemit and are already reaping the benefits. You can too. View Testimonials.Put your brand in front of millions of active remittance users, ready to send money using your services.